Some of the most senior policy makers in Britain held a meeting this May 21st where they agreed on objectives which include:
“Exploring the impact of cryptoassets, the potential benefits and challenges of the application of distributed ledger technology in financial services, and assessing what, if any, regulation is required in response.”
Present was Katharine Braddick, Director General of Financial Services at HM Treasury, with the Treasury being the second most important department in Britain after the Prime Minister’s office.
Attending was also Andrew Bailey, Chief Executive of the FCA, and Dave Ramsden, Deputy Governor of the Bank of England. The latter said:
“The technologies that underpin cryptoassets have the potential to deliver benefits both to the financial system and to the economy it serves.
This taskforce will enable us to work closely with the Treasury and the FCA to explore how the opportunities posed by these technologies can be realised, while also tackling the risks arising from cryptoassets.”
The meeting sets the stage for a roundtable in July, followed by a report in autumn this year. Braddick made no comment, while FCA’s Chief Executive said:
“Cryptoassets have been an area of increasing interest for markets and regulators globally including the FCA. We look forward to working with our counterparts at the Bank of England and the Treasury as part of the taskforce to develop thinking and policy on cryptoassets.”
Following the shock Brexit vote, Britain, once a leader in this space, has sort of stepped back and in a way has created a vacuum, with Switzerland, Estonia and now France, among others, so trying to step up the game.
This neglect, in failing to continue to show foresight, may have been partly due to Brexit, but it might also be due to the change in administration following the abrupt resignation of the then Prime Minister David Cameron and Chancellor George Osborn.
We’ve said in these pages quite a few times that it was probably the civil service that showed foresight in 2014, but we may have been mistaken and it may well have been the then political leadership.
Cameron somewhat surprisingly turned out to be a very popular Prime Minister. Initially the public was quite unsure and thus gave them the Liberal Democrats to constrain them, but as months went on Cameron proved to be quite a leader and was rewarded with pretty much a landslide in 2015.
He lost the EU referendum and thus willingly gave up the office in 2016, but the 52 year old might even make a comeback for he was able to considerably raise London’s standing.
Theresa May, on the other hand, “feels” out of touch. What few comments she has made about this space have been cold. A crypto parliamentary committee under her watch to us looks like a circus, either intentionally or perhaps out of ignorance, with no “real” crypto or blockchain expert invited to testify.
Finally, reading the few words the task-force policy makers gave, they appear warm towards blockchain tech and a bit less warm if not cold towards cryptos.
In short, it looks like there is a leadership vacuum, although we may well be mistaken. Britain was given a second great gift by America regarding ICOs, but while in 2014 they were quick to capitalize on the opportunity, in 2018 it feels like Britain is falling more and more off the crypto map.
British industry/finance, of course, and its citizens, continue to be very much part of crypto and some of its key history, but the regulatory atmosphere is now slightly in question where it concerns some of the most innovative aspects to come out of this space, such as 21st century methods of capital formation through Initial Coin Offerings (ICOs).
It happens to be France that has now taken the lead, with the skyscrapers of Paris growing shiner by the day.
Yet Britain is the first country as far as we are aware to have such a high level policy task-force that concerns this space. They may therefore well surprise us with the Treasury probably keen to encourage Fintech innovation, while FCA remains one of the more innovative regulator.